There’s never been a better time to buy a heat pump — especially in California. Recent additions to the Inflation Reduction Act (IRA) introduced several kinds of incentives for homeowners looking to upgrade to energy efficient heating and cooling systems. As for Californians, the Golden State always leads the charge when it comes to future-proofing and getting off fossil fuels, so it’s no wonder its residents are being enticed with even more rewards to update their homes with energy efficient heating and cooling systems.
Still, while California boasts dozens of incentives for upgrading to heat pumps, actually reaping the rewards of said incentives is a whole other story. When it comes to these rebate programs, “there are significant participation barriers, and it’s challenging for folks to navigate the fine print of various programs and understand whether they qualify for certain incentives,” says Aimee Bailey, the founder and CEO of RockRabbit, an AI-supported platform built to streamline the process of benefiting from decarbonization-focused rebates.
Bailey previously spent over a decade in the energy sector working at utility companies and agencies designing and deploying incentive programs. Rock Rabbit is a product she says she wishes had existed in those previous roles. “Think of us as a TurboTax for heat pump rebates,” she says.
Quilt partnered with Rock Rabbit to insulate customers from the headache often associated with the redeeming rebates — including all the necessary paperwork along the way. With Rock Rabbit’s API built into the reservation process, we’re able to surface all qualifying rebates for the individual homeowner, handle all of the paperwork, and apply the savings upfront (so our customers are never waiting for a check in the mail).
“Incentives are only valuable if they’re accessible. They’re only going to have impact if people use them,” Bailey says. As you research the magical benefits of heat pumps and do some cost comparisons, you might be curious about the kind of rebates available nationally and in the Bay Area. Keep reading to understand the landscape of federal incentives, California rebates, and local financing options for heat pumps. Also check out what you could qualify for when you upgrade to Quilt by visiting our reservation page.
Federal incentives through the IRA
The Inflation Reduction Act offers two main types of incentives for heat pump installations:
1. Tax credits
Under the IRA, homeowners can claim a tax credit up to 30% of the cost of purchasing and installing a heat pump. This tax credit is part of the Energy Efficient Home Improvement Credit. It includes up to $2,000 per year for heat pumps.
In order to be eligible, the heat pump must meet energy efficiency standards set by the Department of Energy, which vary depending on location. This credit is applicable to installations made between 2023 and 2032.
2. Rebates through the High-Efficiency Electric Home Rebate Program (HEEHR)
Low- and moderate-income households qualify for up to $8,000 in rebates for heat pump and installation cost.
Eligibility depends on location; households with income less than 150% of the area median income (AMI) qualify for the rebates. The rebate can cover up to 100% of project costs for low-income households and 50% for moderate-income households.
California-specific rebates and incentives
A great thing about rebates is that they can be stacked. In other words, you can take advantage of federal rewards programs and those specific to your state and county. California is particularly generous when it comes to rebates and incentives for energy-efficient heat pumps, and as Quilt is the most efficient two-zone heat pump on the market, it qualifies for all of them. Baring your individual eligibility, it’s possible to receive more than $10,000 in combined incentives.
Here are some of the state’s most noteworthy programs:
1. California Clean Energy Homes Program
The TECH Clean California program works to advance clean heating technology across California, which includes additional rebates for heat pump installations. The incentives vary by region, but typically range from $1,000 to $3,000 for heat pumps.
2. Utility company rebates
Several California utility companies offer rebates for energy-efficient upgrades — heat pumps included. Homeowners in San Mateo County, for example, can benefit from PCE’s $2,500 rebate incentive when swapping their traditional HVAC systems for heat pumps. It’s a good idea to check in with your specific provider for information on rebates.
3. Energy Upgrade California
This state-wide initiative offers rebates and incentives for several kinds of energy-efficient home upgrades, including heat pumps. This program promotes home energy retrofits, with rebates offered for whole-home improvements — so investing in more sustainable upgrades throughout your home can be even more rewarding (think: pairing your heat pump with solar and battery storage).
4. Regional programs throughout California
There are even more potential rebates to benefit from depending where you’re located in California. BayREN, for example, is a regional program that supports energy upgrades in the nine Bay Area counties; energy efficient heat pumps can earn homeowners up to $1,000 in rebates through this program.
5. Low-income and disadvantaged communities programs
California has developed additional programs to make access to clean energy more equitable. The Low-Income Weatherization Program (LIWP), for instance, offers free or heavily subsidized installation of energy-efficient equipment like heat pumps, for qualifying low-income households.
Local financing options for heat pumps
Heat pumps require an upfront financial investment — even with the incredible rebate options available. Fortunately, there are several financing options available — some loans with 0% APR — to make energy efficiency attainable.
Quilt is an approved contractor for California’s GoGreen and San Mateo’s Peninsula Clean Energy. Through these programs, Quilt customers can access low-cost APR and financing options. After making a reservation, your Quilt Advisor will guide you in choosing the best option and help you gather all the necessary information.
1. GoGreen Financing
Qualified homeowners and renters can receive up to $75,000 in financing for energy upgrades through GoGreen financing. To qualify, the home must receive electricity or gas from PG&E, SCE, SoCalGas, SDG&E, or City of Palo Alto Utilities.
2. Peninsula Clean Energy
Peninsula Clean Energy offers up to $10,000 in loans for energy efficient home upgrades, with 0% APR and no required credit check. The provider also promotes a $2,500 rebate for those who switch their HVAC systems over to heat pumps.
To learn more about electrifying your home beyond heat pumps — and the plethora of incentives that come along with it — check out Rewiring America’s thorough guide to home electrification. Have questions about Quilt’s reservation and rebate process? Get in touch: [email protected]